Charter Subs Benefit From All-Digital Summit

12/12/2004 7:00 PM Eastern

By: By Matt Stump

More than 18 months ago, the prospect of cable systems moving to an all-digital format became a matter of public debate, as Comcast Corp. floated the idea of an all-digital transition over a several-year period.

But as is often the case with new ideas, the strategy shifted as technology and business issues surfaced throughout 2003. In early 2004, it was Charter Communications Inc. that took the first step in announcing the deployment of a digital simulcast system in its Long Beach, Calif., system.

Blessed with enough spectrum to simulcast existing analog channels in digital, Charter launched the service in July. Five months into launch, Charter officials say its “all-digital” offering is a hit with customers and city officials.

Nearly 70% of the Long Beach system’s 75,000 subscribers are digital customers, said Wendy Rasmussen, vice president and general of Charter’s Los Angeles metro markets division.

“Subscribers do notice and appreciate the improved picture quality,” she said. That appreciation is key in cable’s battle with satellite, as the MSO now also uses the words “all digital” in marketing materials.

“Another huge benefit is that it has improved our relationship with the city of Long Beach,” Rasmussen. “It’s also improved employee morale.”

Charter instituted the digital simulcast network with the help of several partners. The company is using Harmonic Inc.’s variable bit rate encoders and third-generation statistical multiplexing system, Terayon Communications Systems Inc.’s CherryPicker for digital ad insertion and the Scientific-Atlanta Inc.’s headend equipment and set-top boxes.

The digital simulcast means that analog-only subscribers can keep their same service without purchasing a digital set-top. The system’s digital subscribers, though, began getting all signals, including 90-plus channels that had been in analog format.

As part of its digital offering, the MSO offers smaller programming packages for about $4 a month, including sports, movie and family and information tiers. Rasmussen said more half the system’s digital subscribers are taking one of these offerings.

Rasmussen said Charter is looking at adding new service offerings, such as a Hispanic tier or a broader foreign-language based tier.

Eyeing the long term, digital simulcast is the first step toward an all-digital network, which would enable operators to reclaim huge amounts of spectrum for additional HDTV channels, video-on-demand services or broadband Internet services. But the all-digital network would require every subscriber, even analog homes without a set-top, to install of low-scale digital box to continue receiving cable service.

It’s an issue the industry continues to wrestle with: How to get a low cost box, perhaps as cheap as $50, into homes that have rejected cable set-tops in the past.

In the meantime, cable is expected to see more implementations of digital simulcast, as pioneered by Charter in Long Beach.